New Zealand is falling behind the rest of the world when it comes to sustainable finance. While other countries and regions have developed projects and funding models which drive solutions to ESG issues, there are still limited options for New Zealand consumers and companies looking to support more sustainable practices. Further, a recent Responsible Investment Association Australasia survey found that New Zealand investment managers prioritise ESG by using negative screening to construct portfolios.
Sustainable finance options are a smart choice for businesses looking to address ESG issues and proactively establish measurement systems and processes. Keep reading to learn how companies can start their ESG journey simply and effectively with Quadrent’s Green Lease.
Sustainable finance wraps governance around funding solutions while addressing ESG issues
New Zealand produces 19.2 kilograms of e-waste per capita each year (compared to a worldwide average of 7.3 kilograms), and only 4% of this is being e-wasted i.e., properly recycled. A great deal of this e-waste is produced by large corporations who dispose of unwanted, unused or outdated devices like any other waste item. This has devastating effects on the environment as devices such as laptops don’t degrade. Sustainability-linked loan (SLL) products can help New Zealand companies access funding while addressing environmental problems such as e-waste.
In larger countries, where the proportion of institutional, wholesale, and retail investors is more balanced, this created an environment where there was a strong appetite for products such as sustainable bonds. While these larger countries have experienced fast growth in sustainable funding in recent years, New Zealand has lagged. For example, New Zealand makes up just $2 to $3 billion of the USD1.03 trillion sustainable bond market annually. SLLs will bridge this gap for smaller economies by opening up new funding options.
Sustainability-linked loans give smaller economies a leg up in ESG progress
The big growth opportunity for investors and companies in New Zealand looking to start their ESG journey and gain financial benefits is the use of SLL products. There are currently 13 companies across New Zealand that have taken out an SLL, with this number set to grow in the coming years. This growth is driven by large financial institutions such as the Bank of New Zealand (BNZ) launching SLL products. For example, BNZ recently launched New Zealand’s first agribusiness SLL, and it is also providing backing for Quadrent’s Green Lease, an asset leasing solution that provides commercial benefits and delivers environmental and social good.
An SLL provides companies with financial benefits and motivates organisations to establish a measurable ESG framework given the criteria that need to be met to access these products. This helps companies proactively address growing ESG expectations, but it also makes New Zealand companies attractive to overseas investors, especially institutional investors with a growing appetite for companies that make a demonstrable commitment to ESG.
Companies who don’t start adjusting their strategy and operations now to address ESG considerations could not only fall behind when it comes to growing expectations and the potential for reporting mandates, but it can jeopardise the ability of companies to raise capital in the future too. Fortunately, with the emergence of SLL products, a range of solutions have emerged that can help companies better deliver their core products and services while addressing ESG issues.
ESG Reporting- The Full Story, or Just the Good Story?
Companies can deliver positive social impacts through Quadrent’s Green Lease
With a Quadrent Green Lease, companies can become part of a circular economy when acquiring, using and disposing of devices such as laptops and mobile phones. This is done by securely decommissioning the devices and getting these ready for a “second life”, where they may have previously gone straight to landfill. Further, as part of the sustainable technology lifecycle, companies deliver a range of benefits to the environment, their communities, and their people. With a Quadrent Green Lease, companies have peace of mind knowing they always have the latest devices, with the decommissioning and recycling process taken care of responsibly and sustainably. On top of these environmental benefits, positive social impacts are delivered too.
Digital inclusion is a serious problem in New Zealand, with people in need unable to access the devices required to work and learn. According to the Digital Equity Coalition Aotearoa, one in ten New Zealanders don’t have access to the technology they need to perform basic tasks such as internet banking or completing homework and assignments. Quadrent’s Green Lease aims to improve digital equity in New Zealand by donating decommissioned devices to the people who need them most. While these devices may no longer be fit for the original lessors, they are suitable for a “second life” of lighter use.
Become part of the ESG and digital equity revolution with Quadrent’s Green Lease
Quadrent’s Green Lease is playing a crucial role in helping New Zealand companies responsibly dispose of their unused devices while improving digital equity for New Zealanders in need. Not only can this help companies address ESG concerns in a measurable way, but the broader positive social and environmental impacts make it a valuable financing option that keeps devices in use for longer.
Quadrent works with organisations helping them to accurately manage their leases, improve IFRS 16 compliance data inputs and proactively manage their ESG risk. With a team that has in-depth leasing knowledge and specialised accounting backgrounds, we’ll help you get the most value out of your assets while addressing growing ESG requirements and expectations.
Start your ESG journey simply and effectively with Quadrent. Click here for more information.
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